Whiston leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Whiston residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Whiston you must investigate if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a property with more than one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Whiston,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Whiston valuers.
After lengthy negotiations with the freeholder of her one bedroom flat in Whiston, Hollie commenced the lease extension process as the eighty year mark was rapidly advancing. The lease extension completed in November 2015. The freeholder’s fees were kept to an absolute minimum.
Last Christmas we were phoned by Dr Alice Sharif , who took over the lease of a basement apartment in Whiston in June 2000. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be to extend the lease by 90 years. Similar residencies in Whiston with an extended lease were valued about £270,000. The average amount of ground rent was £55 collected yearly. The lease ran out in 2100. Considering the 75 years left we calculated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 plus expenses.
Mr A Alexander owned a recently refurbished apartment in Whiston in August 1995. The question was if we could approximate the premium would be for a 90 year extension to my lease. Identical residencies in Whiston with an extended lease were valued about £173,800. The mid-range ground rent payable was £60 billed per annum. The lease elapsed on 3 November 2080. Having 55 years as a residual term we approximated the premium to the landlord to extend the lease to be between £31,400 and £36,200 plus legals.